Reality check for the tax cap

Our opinion: The tax cap was the easy part for the state Legislature. As we’re seeing in some of the budgets now coming out, it’s working, but lawmakers must next tackle the hard work of helping our communities and school districts live with it.

Contrary to the politicians who are trying to score points by accusing other politicians of trying to score points, New York’s tax cap isn’t a hoax or a scam. It is, however, a work in progress.

The tax cap does exactly what it’s supposed to do. It sets a limit on local government and school tax levies, while allowing citizens, through direct vote or their elected representatives, to override that constraint.

What’s missing is some significant unfinished business. The Legislature did the easy part — it passed the fiscal discipline on to local governments and school boards. But it avoided the heavier lifts — coming up with ways to help people who can no longer afford their taxes and relieving other governments of the burden of some state mandates.

Let’s remember why the tax cap was passed. Something had to be done about the ever-rising property tax burden in the state. A complete overhaul of the system — one that would have shifted the bulk of school funding away from the substantially regressive property tax to more progressive income taxes — wasn’t in the cards. Even if it was revenue-neutral, it would have meant the state would have had to raise taxes while enabling communities to cut them. The governor and Legislature lack the courage necessary for such a politically risky move.

So they took what seems to have been a reasonable first step, setting a modest benchmark for annual property tax levy increases. Levies — the total amount to be raised from taxes, but not necessarily an individual’s tax rate — can rise 2 percent or the rate of inflation, whichever is smaller.

At the same time, if communities or school districts want to exceed the cap, they must get approval from a super-majority of their governing boards, in the case of local governments, or their voters, in the case of most school districts.

The real test of the law will likely come over the next year or two as school districts and voters see if they can live with the cap. But we’re already learning a great deal as local governments roll out their budgets.

First, the cap is doing what it was supposed to do. Many local tax levy increases are coming in under 2 percent. Where some are not — such as in Albany County, where outgoing County Executive Michael Breslin has proposed a 19.2 percent tax hike — the County Legislature shows every sign of having a vigorous debate.

Second, we’re seeing exactly what the cap doesn’t do. It doesn’t offer relief to people who are already struggling to afford their property tax bills. Short of picking up more of the tab for school funding, the state could have accomplished tax relief by passing a circuit breaker to help those whose property tax exceeds a certain percentage of their income. But that would take money, something the state has been short of.

And third, it underscores the need for mandate relief, proposals for which are hardly in short supply. School boards have long held out a lengthy list of possibilities, the review of which should be on the Legislature’s front burner come January.

And a very doable reform idea comes from Syracuse Mayor Stephanie Miner, who wonders why, when a public employee contract dispute goes to binding arbitration, the arbitrator cannot consider a community’s ability to pay.

We’re guessing that’s another brilliant idea from a state Legislature that didn’t have to live with the consequences of its actions.

Jay Jochnowitz

4 Responses

Absolutely correct. It was the easy way out. In the Thruway belt from Syracuse to Buffalo there are some of the highest effective tax rates as a percentage of value in the country. In villages this rate exceeds 4% of value per year. (Tha it $4,000 plus on a $100,000 house) A tax cap is a “legislated increase” and is USELESS as relief to overburdened taxpayers. How many of you know that the Massachusetts tax cap, the one the governor so nobley championed, was done in 1980. Thats right, the best we can do in NY is a 31 year old idea MINUS the mandate relief that would have made it effective. Per your article, I wouldn’t even sarcastically call it “brilliant.” It is a bastardized, toothless version of 31 year old legislation and our weak elected officials should be ashamed.

I really feel the whole school system in the area needs to be restructured. Schools with under 100 kids per grade need to be closed, which also means cutting back on the number of principals, vice principals, and administrators.
Until this is done, it is not fair to make the home owners and tax payers pay for this very inefficient system.
Also look at how many home owners are exempt and examine if they really should be.
I went to a small high school in Florida comprised of three small towns with mostly low income homes and the elderly. We had 1 principal, and 4 guidance counselors (which were not useful); no vps or administrators, etc. We never had financial difficulties or programs cut and I received a much better education than my contemporaries in NY and undoubtably better than what our children in NY are receiving today.

Excellent analysis! One piece is missing. The state-which purports not to have money to address the ruin of the middle class- is rebating 14 billion every year in stock transfer taxes to Wall Street…like they really need it.
In addition Cuomo is determined to let the millionaire’s tax sunset-an incredible 5 billion tax break for the mega rich…
That’s the nub of the issue. Whom does state government serve? Their actions show that it is not the middle class property taxpayer or those seeking affordable housing. It’s the 1% who are already doing very well.